I applaud the fact that your agency has identified a niche in the HNW personal lines market. That market certainly values your services, however as you note, that is VERY limited market and doesn’t serve the 99% of the general insurance market. For the rest of the market, I’m confident that the direct writers will continue to gain market share in the personal lines and small commercial areas. Middle and large commercial accounts will seek trusted advisors, as will financial insurance consumers. I challenge your remark that the direct writers don’t provide advice, they do, and what I found in my 35+ years of experience working as an agent and carrier leader is that advice continues to be be more intuitive than the and proactive than many local agents. The exclusive agent does have challenges, which is why you will see many of the exclusive agents shifting their focus to commercial and financial service advice, and away from the personal lines and small commercial, looking more “independent” like. Interesting times!
The exclusive agent, also known as Captive(look up the meaning of this word), has more than just challenges… they will continually be squeezed more and more by their captive carrier. I agree with the article in that I think eventually most of the big captives will distribute through independent agents. Allstate already does, and Farmers is out of control. State Farm, who knows what is in store? Nationwide is going to be through IA’s soon… I don’t see agents going away anytime soon.
Thank you for your comment. Independent agents (IAs) are trusted advisors for all clients, not just those in the high net worth personal lines market. We continue to thrive because of relationships. While some direct writers and captive agents may offer some good pointers, consumers seek personalization, customization and options for all their insurance policies. Since we have access to multiple carriers, I think IAs are best positioned to serve these needs. We believe the two channels for growth in our industry going forward will be IAs and directs.
I applaud the fact that your agency has identified a niche in the HNW personal lines market. That market certainly values your services, however as you note, that is VERY limited market and doesn’t serve the 99% of the general insurance market. For the rest of the market, I’m confident that the direct writers will continue to gain market share in the personal lines and small commercial areas. Middle and large commercial accounts will seek trusted advisors, as will financial insurance consumers. I challenge your remark that the direct writers don’t provide advice, they do, and what I found in my 35+ years of experience working as an agent and carrier leader is that advice continues to be be more intuitive than the and proactive than many local agents. The exclusive agent does have challenges, which is why you will see many of the exclusive agents shifting their focus to commercial and financial service advice, and away from the personal lines and small commercial, looking more “independent” like. Interesting times!
The exclusive agent, also known as Captive(look up the meaning of this word), has more than just challenges… they will continually be squeezed more and more by their captive carrier. I agree with the article in that I think eventually most of the big captives will distribute through independent agents. Allstate already does, and Farmers is out of control. State Farm, who knows what is in store? Nationwide is going to be through IA’s soon… I don’t see agents going away anytime soon.
Dear Why not?:
Thank you for your comment. Independent agents (IAs) are trusted advisors for all clients, not just those in the high net worth personal lines market. We continue to thrive because of relationships. While some direct writers and captive agents may offer some good pointers, consumers seek personalization, customization and options for all their insurance policies. Since we have access to multiple carriers, I think IAs are best positioned to serve these needs. We believe the two channels for growth in our industry going forward will be IAs and directs.
Sincerely,
Spencer Houldin, IIABA chairman